PENN, ESPN Forming Partnership
The sports betting industry received some big news on Tuesday as PENN Entertainment and ESPN are partnering on a massive deal. Penn Entertainment is moving on from the Barstool Sportsbook brand and ESPN BET is coming to the industry.
Penn currently has market access in 16 different states, and that will give ESPN BET a huge footprint right away. ESPN recently held talks with both Caesars and DraftKings as it was looking for a sports betting partner, but Penn Entertainment was able to secure the deal.
Penn and ESPN have agreed to a 10-year deal and it will see $1.5 billion being paid to the “Worldwide Leader in Sports.” Many in the industry have been waiting for ESPN to make the jump into sports betting and it has finally happened.
ESPN also has a chance to purchase nearly 32 million stocks of PENN with a valuation of close to $500 million. Caesars has provided sports betting data to ESPN for the last several years, but now it will be PENN that provides all of that information.
PENN CEO Jay Snowden is optimistic that ESPN BET will be able to compete with both DraftKings and FanDuel at the top of the sports betting industry. Snowden believes that a market share close to 20% is a possibility, which would make it one of the leaders.
Launch Coming This Fall
A specific launch date for ESPN BET was not included with the announcement, but it is going to happen at some point this fall. Since the NFL season is set to start in just over a month, both sides will be looking to get things up and running quickly.
Every state in which Penn currently holds a license will have a different process in place, and ESPN BET will likely be rolled out in phases. Using the new technology that came with Penn’s purchase of theScoreBet, ESPN BET should feature some of the best technology in the entire industry.
Portnoy Buys Company Back For $1
It was only a few months ago that PENN Entertainment officially completed the purchase of Barstool Sports, and that purchase came with a price tag of $550 million. Owner and founder of Barstool Sports, Dave Portnoy, was able to buy his company back for just $1 through this deal.
Portnoy took to social media to announce that he will never look to sell his company again, and that would come with a cost. After signing a noncompete deal, Barstool agreed to pay ESPN 50% of all revenue if it were to partner with another company.
Penn became increasingly frustrated in having to pay for fines that were caused by actions from Barstool Sports employees, and the partnership simply wasn’t working. Penn did gain more than 1.5 million customers after acquiring Barstool, but Penn initially claimed that it would be gaining access to more than 60 million followers of Barstool.
Now that Barstool is completely out of the sports betting industry, the media company will go back to producing sports betting content without any regulation.
